Several Blockbuster Deals And A Few Smaller Ones Highlight The Mergers And Acquisitions Landscape In The Aggregates Industry.
Vulcan Materials Acquires U.S. Concrete
Vulcan Materials Co. acquired U.S. Concrete Inc. Headquartered in Euless, Texas, U.S. Concrete operates in large, attractive metropolitan areas that complement Vulcan’s existing footprint. With 27 aggregates operations serving California, Texas and the Northeast that shipped 12.6 million tons in 2020, the acquisition of U.S. Concrete’s portfolio represents a natural addition to Vulcan’s business. The transaction also provides strategically oriented ready-mixed concrete operations that will expand Vulcan’s service capabilities.
• Complements Vulcan’s existing aggregates business in California with access to blue-water source of high quality aggregates reserves.
• Enhances Vulcan’s position in key Texas growth areas.
• Expands Vulcan’s aggregates footprint, including in the attractive New York and New Jersey metropolitan areas.
• Expected to increase Vulcan’s EBITDA by approximately $190 million before synergies.
• Expected to be accretive to Vulcan’s earnings per share in the first full year following closing.
Tom Hill, chairman and CEO of Vulcan Materials, said, “U.S. Concrete is an important Vulcan customer in a number of key areas, and this transaction is a logical and exciting step in our growth strategy as we further bolster our geographic footprint. Ronnie Pruitt and his team have done an excellent job growing and operating its business, and we look forward to welcoming the U.S. Concrete employees to the Vulcan family. This is a merger of two corporate cultures that value people, technology, operating disciplines, customer service and the entrepreneurial spirit, and it positions Vulcan to further drive sustainable, long-term shareholder value.”
Ronnie Pruitt, president and CEO of U.S. Concrete, added, “Today’s announcement that we are combining with Vulcan, a leading producer of construction aggregates, marks a major milestone in U.S. Concrete’s history. We are proud of the work our team has accomplished over the past few years to achieve operational excellence and serve our customers and believe combining with Vulcan will provide us with the opportunity to build on our progress. Our combined organization will share an extensive and successful track record of acquisitions and greenfield development, and we look forward to working with Tom and the entire Vulcan family to close this transaction and integrate our two strong businesses.”
The Greystone Group is serving as financial advisor to Vulcan. Truist Securities, Inc. is serving as sole lead arranger on committed financing to Vulcan. Wachtell, Lipton, Rosen & Katz and Bradley Arant Boult Cummings LLP are serving as legal counsel to Vulcan. Evercore and BNP Paribas Securities Corp. are serving as financial advisors to U.S. Concrete. Gibson, Dunn & Crutcher, LLP and Akin Gump Strauss Hauer & Feld LLP are serving as legal counsel to U.S. Concrete.
Martin Marietta Acquires Lehigh Hanson Assets
Martin Marietta Materials Inc. acquired Lehigh Hanson Inc.’s West Region business from HeidelbergCement for $2.3 billion in cash. Lehigh West Region provides the company with a new upstream materials-led growth platform across several of the nation’s largest and fastest growing megaregions in California and Arizona.
The acquisition, which is consistent with and advances the company’s SOAR (Strategic Operating Analysis and Review) 2025 plan, includes 17 active aggregates quarries, two cement plants with related distribution terminals, and targeted downstream operations.
Martin Marietta now has a coast-to-coast geographic footprint with expanded product offerings.
Ward Nye, chairman, president and CEO of Martin Marietta, stated, “We continue to successfully execute on our strategic initiatives to enhance our footprint and responsibly expand our business. Lehigh’s West Region has leading positions in some of the nation’s most attractive markets, providing Martin Marietta with access to new geographies for continued industry-leading growth. With this acquisition, our company will be well-positioned to capitalize on long-term demand drivers from increased state infrastructure investment in California and Arizona as well as continued private-sector growth across these regions. We are confident in our ability to quickly realize the benefits of this transaction following the same proven approach we took with our acquisitions of TXI and Bluegrass. Those purchases delivered significant value creation as will the addition of the Lehigh West Region as Martin Marietta SOARs to a Sustainable Future.”
“The sale of our U.S. West region activities is a major step in our portfolio optimization as part of our ‘Beyond 2020’ strategy,” said Dr. Dominik von Achten, chairman of the managing board of HeidelbergCement. “We are simplifying our portfolio in North America and prioritising on the strongest market positions. Our engagement for the North American market is stronger than ever.”
Chris Ward, president and CEO of Lehigh Hanson Inc., reiterated HeidelbergCement’s high commitment for future growth in North America. “We will accelerate the build-out of our positions in the four key regions Canada, Midwest, Northeast and South through selected bolt-on acquisitions and capacity expansion projects in the future.”
Prairie Material Acquires Valley View Industries
Prairie Material acquired Valley View Industries Inc., based in Livingston County, Ill. “Valley View Industries is now part of the Aggregates Division of leading building materials supplier, Prairie Material. Thank you for your patience during the transition,” Valley View stated on its website.
Valley View is a family owned and operated business. The company operates three limestone quarries near the cities of Cornell, Pontiac and Fairbury that provide a complete line of aggregates, agricultural limestone, crushed stone products and road building products for commercial, agricultural and personal use.
Valley View takes great pride in the reclamation of its quarried property into an attractive and well maintained water-sight landscape. It offers products and services to Bloomington-Normal, Central Illinois, Livingston and McLean counties and throughout the state of Illinois.
The company also operates a shale pit and trucking division. The shale pit provides the primary raw material in the manufacture of brick, while the trucking division delivers bulk aggregate and brick products throughout Illinois as well as the surrounding states.
“We are dedicated to supporting the construction and agricultural industries in Central Illinois and are excited to welcome Valley View and its 30 employees to our company,” Warren Hawkridge, general manager for Prairie Material’s Aggregates Division told the Pontiac Daily Leader. “When we learned that the business was potentially for sale, we felt it was a strong company with a great culture that would fit well within our existing business portfolio and further strengthen our presence and ability to serve customers in Central Illinois.”
In 2008, Prairie became part of Votorantim Cimentos North America (VCNA), an international company of building materials suppliers with locations on five continents, including North America, with presence in Canada and the southeastern United States.
Arcosa Acquires Southwest Rock Products
Arcosa acquired Arizona-based Southwest Rock Products LLC and affiliated entities for $150 million. Southwest Rock is a pure-play natural aggregates company serving the greater Phoenix metropolitan area with five active sand and gravel locations and one hard rock quarry producing approximately five million annual tons of construction aggregates.
“I am excited to announce the acquisition of Southwest Rock, which is an excellent strategic fit for Arcosa,” said Antonio Carrillo, president and chief executive officer. “The business is aligned with our strategy to reduce our cyclicality and enter new and attractive geographies. Southwest Rock has an experienced operating team, a strong footprint in the high growth Phoenix market area, and a pipeline of actionable bolt-on opportunities.
“We have made considerable progress advancing our portfolio shift into higher margin and more stable Construction Products,” Carollio noted. “Since our spin-off, we have invested approximately $1.3 billion in construction materials acquisitions, which has expanded our Construction Products businesses to now represent more than 50% of our Adjusted EBITDA.”
The company bundled the announcement in with its second quarter report, in which it achieved revenues of $515.1 million, up 3%; net income of $20.8 million and adjusted net income of $29.1 million.
New Frontier Materials Buys Fred Weber Quarry, Asphalt Assets
New Frontier Materials, a company formed last year to acquire companies in the construction materials industry, purchased Fred Weber’s asphalt and rock quarry assets, giving the new firm more than 20 asphalt and quarry sites.
Sherrod B. (Mike) Clarke is CEO of New Frontier, which lists a New York office in business filings and is backed by a private group of family offices and institutional investors. Clarke is a 35-year veteran of the construction material industry, previously working for Vulcan Materials. Don James, retired chairman and CEO of Vulcan Materials, chairs New Frontier’s board.
In a story in the St. Louis Post Dispatch, Clarke said that this is New Frontier’s first acquisition and that the former Fred Weber assets will serve as a base from which to acquire similar businesses in other markets. “It’s a platform to look at other companies in the United States,” Clarke said. “It’s the beginning, it’s our first foray, and we look to add to that.”
Clarke said the management and operations teams for Fred Weber’s quarry and asphalt operations will remain in place. Fred Weber Inc. will maintain some lines of business and about 175 local employees, while some 300 move under New Frontier.
Fred Weber Inc. was led by members of the Weber family until 1986, when employees purchased the company through an employee stock ownership plan.
BMC Enterprises Makes Strategic Acquisitions
St. Louis-based aggregates and concrete producer BMC Enterprises Inc. acquired Stewart Concrete Products headquartered in Halfway, Mo., and created a strategic partnership with Stewart-Morrison Redi-Mix Inc. based in West Plains, Mo., bringing the company’s recent acquisitions to five in the last 13 months.
Stewart Concrete Products and Stewart-Morrison Redi-Mix Inc. will operate as new portfolio companies under BMC. Acquired assets from both transactions include five concrete products locations, eight ready-mix concrete plants, and two sand and gravel mines throughout southwest Missouri and central Arkansas. Terms are not disclosed.
“These acquisitions further reinforce BMC’s reputation as a super-regional, vertically integrated construction materials company,” said Nathan McKean, CEO of BMC Enterprises Inc. “We’re pleased to welcome the employees of Stewart Concrete Products and Stewart-Morrison Redi-Mix, and are excited to serve several new communities.”
These transactions follow three other acquisitions throughout southern and eastern Missouri within the last 13 months, including Payne Ready Mix Concrete in Dudley and Poplar Bluff, Tri-County Concrete in Van Buren, and Spencer Ready Mix Concrete in Poplar Bluff. During this time, BMC also acquired more than 100 acres of real estate in eastern Missouri, dramatically increasing its aggregate reserves for its mining operation in Old Monroe.
Founded in 1925, BMC began as F.E. Breckenridge Material Co. Under McKean’s leadership, BMC has grown seven-fold since he assumed control of the company in 2004. Recognizing BMC’s need to expand its geographic footprint and vertically integrate, McKean and his team have implemented a long-term sustainable growth strategy through 27 acquisitions in three states over the last 17 years, including five during the COVID-19 pandemic.
“By continuing to bolster our presence throughout the region, we’re demonstrating our commitment to providing high-quality ready-mix concrete, construction materials and logistical advantages to customers from Hannibal to Cape Girardeau, and west to Springfield and beyond,” McKean said.
Luck Stone Acquires Ararat Rock Products
Luck Stone acquired North Carolina-based Ararat Rock Products, which operated quarries in Mount Airy and Eden. The purchase marks one of the largest acquisitions in the company’s nearly 100-year history and significantly expands Luck Stone’s presence in North Carolina beyond its quarry operation in Pittsboro.
Ownership transitioned to Luck Stone on Oct. 1 with the quarry locations now open for business as Luck Stone’s Mount Airy and Eden Plant locations.
“The acquisition of Ararat Rock Products is incredibly meaningful to our organization as it represents tremendous growth opportunities for many, including our associates, customers and these great communities we are joining,” said Charlie Luck, president and CEO of Luck Companies. “In addition to broadening the reach of our mission and values culture, we look forward to learning from talented new team members, strengthening our operational excellence and ensuring sustainable success for our company’s growing footprint in the Southeastern United States.”
Founded in 1955 by “Big Jim” Crossingham, Ararat Rock Products has remained family-owned since that time. Third-generation family member James Crossingham has most recently led the company and carried on his grandfather’s legacy.
“I am very proud of Ararat Rock Products and what our family has built over the last 66 years in this business,” said Crossingham. “Many thanks to our loyal customers and employees who have been the ones that made this business the success that it has been,” he continued. “Luck Stone is a first rate outfit and I feel strongly that I am leaving our customers and employees in the best of hands. I believe God put our two families together for a reason and I pray that he continues to bless them as he has us.”
“At Luck Stone, partnership and collaboration are core components of our operating philosophy,” said Jim Van Ness, regional vice president at Luck Stone. “We are working closely with the Ararat team to ensure a smooth, thoughtful transition of Ararat Rock Products’ impressive locations in Mount Airy and Eden into our enterprise.”
In 2018, Luck Stone experienced significant growth in the Southeast through the acquisition of Willow Oak in Kershaw, S.C., and Stephens Industries in Atlanta. Today, Luck Stone’s Kershaw Plant and Atlanta-Stephens Plant are in their third year in business and have propelled the company’s concerted growth effort in the Southeast.
“With a favorable business climate and one of the fastest economic growth rates in the country, North Carolina is an important geography for Luck Stone,” said John Pullen, chief growth officer at Luck Companies. “We see great opportunity to continue supporting infrastructure growth by investing in associates, customers, and communities across North Carolina for the long term,” Pullen explained. “Building on our recent growth momentum in South Carolina and Georgia, this exciting expansion in North Carolina is in direct alignment with our people-focused growth strategy, which drives us to pursue opportunities that allow us to make a positive impact on people and in communities where we conduct business.”